‘We’re cutting our reliance on Chinese raw materials’

livemint.com:

₹1,500 crore in 2022-23, is looking to cut its reliance on Chinese raw material, even as it expands to Latin American markets. In an interview, Bhavesh Shah, managing director of the Gujarat-based firm, shared his views on how erratic rains dampened kharif sales as well as the concerns arising out of the improper use of pesticides by farmers. Edited excerpts: Kharif was not good due to (erratic) rainfall.

While some regions witnessed flood, there was drought in other areas. August was particularly bad due to high rainfall deficit. This affected everyone in the agrochemicals industry.

Crops such as soya bean, groundnut and paddy have been impacted. Our revenues were same as last year, but volumes grew 10-15% due to new product launch. Sales revenue is stagnant because prices of generic product prices are down 15-20%.

It is an industry-wide phenomenon due to pile up of inventories in global markets. Chinese manufacturers of raw materials have reduced prices sharply. When farmers feel that the crop may not be normal, they cut their investments and spray fewer times.

For instance, cotton is typically a 150-day crop and if it does not rain in the first 60 days it is risky to spend more on it. For crops, such as chilli, which is grown using irrigation systems, this does not happen. Reducing investment is more common in (rain-fed) crops such as cotton, soya bean, and groundnut.

September rainfall will help in improving soil moisture and the planting of rabi crops in eastern and central India. In northern states, including Haryana, Punjab, and Uttar Pradesh, irrigation facilities are better. We expect high planting and higher production of crops such as wheat, mustard, and potatoes.